New freedoms to increase council house building

The extra money could free councils to invest in the building of more council houses, helping to deliver more homes for families in need.

Councils currently only build a few hundred council homes a year, with the majority of new social homes being built by registered social landlords. The consultation proposals would seek to boost this build rate by removing some of the financial barriers stopping councils from building new properties and increasing their housing stock.

Housing Minister Margaret Beckett said she wanted local authorities to play a bigger role in the delivery of council housing and invited councils interested in building more homes to discuss their ideas with the Homes and Communities Agency.

Margaret Beckett said: "We are determined to help keep house building going in the current climate, as the long-term need for more homes is not going to disappear. These new freedoms will encourage councils to play a bigger role in driving forward the delivery of new affordable homes for families in housing need."

The Government recently announced it would invite councils to bid for a share of the capital grant given to social landlords to subsidise the cost of new housing. The new financial rules will make it possible for councils to compete for this funding alongside other providers of social housing such as registered social landlords.